WASHINGTON, D.C. — US producer inflation climbed in November, government data showed on Thursday, logging its biggest year-on-year increase since February 2023 as food costs jumped.
But on a monthly basis, underlying price increases remained muted when volatile areas such as food, energy and trade services were excluded, the Labor Department report said.
The report will be scrutinized for any bearing it may have on the US central bank’s policy meeting next week, with Federal Reserve (Fed) officials widely expected to lower interest rates again at the end of the gathering.
The producer price index came in at 0.4 percent last month, seasonally adjusted, up from 0.3 percent in October, said the Labor Department.
Excluding food, energy and trade services, the index ticked up 0.1 percent from October to November, down from the prior month’s 0.3-percent figure.
Thursday’s report was hotter than analysts expected.
The index for goods rose 0.7 percent in November, the largest increase since rising 1.1 percent in February, the agency said.
Most of the advance could be traced to food costs, as chicken eggs became more expensive along with some other items.
The Fed has been lowering the benchmark lending rate gradually as inflation cooled from painfully high levels in 2022.
But policymakers have been cautious to reduce rates too quickly as they monitor progress on inflation.
“This is not what the Fed and markets were hoping for, but it is a small overshoot that is unlikely to affect the Fed’s judgment about the course of inflation and policy interest rates,” said High Frequency Economics in a note.
It added that “policymakers will approach the December rate decision cautiously, keen to avoid having to reverse course at some future date due to unexpected rekindling of inflation.”
On Wednesday, the Labor Department reported that the consumer price index had also risen in November, to 2.7 percent, the second consecutive month with an increase.
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